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Government shutdown: What does it mean for you and your clients?

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The federal government shut down at midnight on Tuesday morning. The president and Senate Democrats remain at loggerheads with House Republicans on a government funding measure known as a continuing resolution (CR). At this point, no one knows how long the impasse will last. Both sides believe that public opinion is in their favor. House Republicans continue to insist on changes to the President’s health-care law, while the Senate has made clear it will only pass a “clean” CR.

The legislative hot potato has gone back and forth between the House and Senate for several days. The House’s opening salvo two weeks ago funded the government, but it also defunded the Affordable Care Act. The Senate stripped the health care language and sent it back to the House. The House has since passed several versions of the CR with several caveats.

In addition to defunding Obamacare, on separate occasions it has included a full year delay of the law and a repeal of the medical device tax, and a delay of the individual mandate and the cancellation of health insurance subsidies for policymakers. Each time, the Senate rebuffed the House’s efforts and sent a “clean” CR back to the House.

See also: Grand theft GOP

The effects of a shutdown depend upon each federal office and the length of the shutdown. Congressional offices remain open, though congressional staff will not be paid unless Congress authorizes back pay. Federal agencies are operating with skeleton staffs, and the Executive branch’s regulatory activity is expected to slow. Three-quarters of the White House staff are furloughed.

What does it mean for you?

The Treasury Department will continue to disburse Social Security funds. The IRS will discontinue key functions such as audits, examinations of returns, processing of paper returns, and call-center operations for taxpayers with questions. According to the Treasury, “IRS would halt non-automated collections and tax processing activities, but would continue activities necessary for the protection of government property. These activities include, but are not limited to, processing tax payment remittances; computer operations necessary to prevent loss of data in process and revenue collections; retaining minimal personnel to maintain safe conditions for essential personnel; maintaining criminal law enforcement and undercover operations; and the protection of statute expiration, bankruptcy, liens and seizure cases. The IRS would halt taxpayer services such as responding to taxpayer questions, including telephone customer service functions.”

See: Life insurer portfolio safe from debt ceiling brinksmanship

The SEC announced that it would remain open and use funds leftover from last year to continue operations. An SEC statement noted, “We have determined that our carryover balances are sufficient to allow us to remain open for a few weeks if there is a lapse of appropriations.” For more information regarding the SEC, please visit its homepage at or check out the SEC’s Plan of Operations.

At the Department of Labor, roughly 3,000 of the agency’s 16,116 employees will continue to work during the shutdown. Those employees largely work in public safety and health.

The Department of Health and Human Services (HHS) is expected to furlough roughly half of its staff, but this is not expected to affect individuals receiving health care through Medicare and Medicaid. These payments will continue uninterrupted to recipients.

The Department of Veterans Affairs’ shutdown guide indicated that “All VA medical facilities and clinics will remain fully operational. The Veterans Health Administration has received an advance appropriation to continue its services without disruption.”

For additional information on the federal government activities affecting the insured retirement income industry, visitors can visit IRI’s Advocacy Center.

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